Bad Bad Bank

More on CDO value from the FT (h/t entire blogosphere): http://www.ft.com/cms/s/0/2970532c-0421-11de-845b-000077b07658.html?nclick_check=1 - ugly.

Ultimately, the taxpayer will pay one way or another, either through greatly diminished job prospects and/or significantly higher taxes down the line to pay for the massive debt issuance required to fund current and prospective fiscal spending initiatives.
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But isn't it the opportunity cost that is ultimately most relevant? If say the government spends $45 billion for shares that it could have bought for $6 billion, isn't the question what else could have been done with that $39 billion?

Where's Ken Starr when we need him?

Thank You points from Boob Rubin.

http://finance.yahoo.com/news/Economy-shrinks-even-more-apf-14491192.html;_ylt=AoYPQ5o0ADMQI0klpflYVMG7YWsA

CLIXON REGIME = CRIMES AGAINST AMERICAN HUMANITY

LET THE HEARINGS COMMENCE.

Michael-I heard an NPR story yesterday about a guy driving around to small community banks and helping them figure out what they actually own. He claimed that usually when these small bank shows him whatever document they may have received to explain the asset it has less information on it then a receipt from Costco.
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He also claimed that brokers from Wall Street came to these little towns and banks and sold these things using the credit AAA ratings as back up.

Completely OT but this is the funniest thing I have read in a while.
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And check out this latest development in Steele's campaign to create a hip-hop image for the GOP. Michele Bachmann praised Steele's speech: "Michael Steele! You be da man! You be da man."
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http://tpmdc.talkingpointsmemo.com/2009/02/steeles-new-gop-message-my-bad-bachmann-to-steele-you-be-da-man.php?ref=fp1

reposted from below, here's hilzoy: Now That's What I Call Toxic!
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If I'm reading this right, within four years of being issued, two thirds of these CDOs are in default, and their recovery rates are very, very low. That's just staggering. It's actually hard to understand how the banks managed to do this badly: you'd think they could have done better hiring people off the street and paying them to put all those nice little loan documents into piles at random, or tossing mortgages down the stairs and bundling them based on how they landed. They certainly didn't need to hire people with advanced math degrees and pay them seven- or eight-figure salaries to get these kinds of results.

And how about those ratings agencies? They would have done a better job using a Magic 8-Ball to rate the CDOs. ("Signs point to junk!")

Michael-Since you brought up the earmarks yesterday.
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President Barack Obama's former nominee to become commerce secretary, Sen. Judd Gregg, steered taxpayer money to his home state's redevelopment of a former Air Force base even as he and his brother engaged in real estate deals there, an Associated Press investigation found.
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http://www.talkingpointsmemo.com/news/2009/02/ap_exclusive_gregg_had_stake_in_won_aid_for_base.php?ref=fp6

Michael-Never mind my last. I looked down the page and see you did post about.

P-NNTO, I thought this was pretty hilarious too: http://wonkette.com/406609/radio-host-forces-michael-steel-to-give-slum-love-to-bobby-jindal

Agree on that piece from "This American Life," Michael. That was the simplest, most direct explanation of the housing/mortgage bubble I have heard.
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Should give you something to shoot for, from a reporting perspective. But tell us again how another reporter (again, not you) uncovered an earmark for Obama.

Michael Scherer:
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The memo calls to mind a burglar who breaks into your house, takes your television, cuts himself on the way out the window, and then demands that you pay for an ambulance or he will bleed all over your rhododendrons, and sue you for having a broken glass in your house.
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The memo also calls to mind the music industry's response to Napster.
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Thanks for posting this.

rose83
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I would describe it as pathetic instead of hilarious. Michael Steele is a walking talking breathing parody and very soon there won't be anybody who takes him seriously.

I would describe it as pathetic instead of hilarious.
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Can't it be both? It is amazing - and hilarious - that Steele was elected to help broaden the tent and then he ends up reducing one his party's top politicians to his race.

This reminds me of the time that a politician blatantly lied in a national address and the MSM completely ignored it:
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Jindal Admits Katrina Story Was False
http://tpmmuckraker.talkingpointsmemo.com/2009/02/jindal_admits_katrina_story_was_false.php?ref=fp1

Bachmann makes me ashamed of my adopted state of Minnesota.

Can my fellow Swamplanders help me out?

Somewhere in the last couple of days, I thought it was at Huffpo, I read an article about how the FBI had long suspected fraud in the mortgage industry. I think the guy's last name who wrote it was Black. Does anyone remember anything about this article?

Google: FBI mortgage fraud Huffington
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http://www.huffingtonpost.com/william-k-black/the-two-documents-everyon_b_169813.html

cincinnatus:
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Isn't the story's exaggeration totally beside the point?
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Isn't the real problem with the story that Jindal has unintentionally admitted that ideological Republican governance was a catastrophic failure in practice?
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Can't we get past the whole "Oooh! Liar liar!" thing that Scherer & Co love so much, and skywrite: Jindal Calls Bush Administration Failure on Katrina?

rose83-thanks for that link!
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I do not exaggerate when I say Steele makes me laugh every time I see him. From his using air quotes when talking about the "services provided" by his sister's company to his bringing hip-hop to the GOP. Now Slum Love. Awesome.

Cincy, thank you!